LONDON – The European Commission (EC) has voted on implementing environmental taxes on long-haul flights. Ryanair has welcomed this graciously.
Known as the Emissions Trading Scheme (ETS), the richest passengers on the most polluting long-haul flights, will have to pay ETS taxes on top of their airfare.
O’Leary Welcomes The Motion…
Ryanair CEO Michael O’Leary has welcomed this motion by the European Commission saying:
“We welcome this European Parliament vote to bring Europe’s most polluting long-haul flights, within the scope of Europe’s ETS environmental tax regime.”
“It is absurd, unfair, and inexplicable that short-haul flights across Europe, which are taken by hard-pressed European consumers and their families, pay all of Europe’s ETS taxes yet they account for less than 50% of Europe’s aviation CO2 emissions.”
“It is high time that the richest visitors to/from Europe traveling on long-haul flights paid their fair share of environmental taxes, and this exemption of long-haul flights under the ETS regime (which was designed to further subsidize and support high-fare flag carriers like Air France, Lufthansa, KLM, and others) is ended.”
“The richest long-haul passengers should pay their fair share of European ETS taxes, and hard-pressed European consumers and their families should only pay a lower, more equitable share of ETS taxes when their short-haul flights account for less than 50% of European aviation CO2 emissions.”
“We now call on the EU’s Member States and the European “Green Deal” Commissioner Frans Timmermans to support this European Parliament vote and finally require high-fare flag carriers like KLM, Air France, and Lufthansa to pay their fair share of ETS taxes by including long-haul flights, that account for more than 50% of European aviation CO2 emissions, within the ETS.”
The Fair Share Argument…
As outlined by Ryanair the graph above highlights how long-haul flights don’t pay as much ETS as short-haul flights do.
It is understood that long-haul flights represent around 52% of CO2 emissions in European aviation. As the Irish low-cost carrier says in the press release:
“Why should the richest citizens of Russia, China, India, and the USA pay zero ETS or jet fuel taxes on their polluting long-haul flights to/from Europe, while Europe’s hard-pressed citizens, families, and holidaymakers, who account for less than 50% of Europe’s CO2 emissions, pay 100% of Europe’s ETS aviation taxes.”
Competitive Basis…
This does have the opportunity to benefit Ryanair, especially as some long-haul carriers do operate short-haul services, so this would produce better competition.
At first, it may seem odd that O’Leary is pleased with the outcome regarding a market he has never dabbled in, but it will affect the short-haul side of the long-haul carriers.
Looking ahead, it will definitely be interesting to see what sort of competitive benefit this will have for Ryanair and whether it will make the competition more tight-knit.
